Corporate hegemony and the Keystone Pipeline

The oil industry has corrupted the Keystone XL environmental assessment process just as it has hijacked the climate change debate and interfered with action. Reading the US Department of State Environmental Impact Statement (EIS), it is clear whose interests are served by this report. The confluence of arguments presented in the report with the arguments of the American Petroleum Institute (API) is stunning.

Environment Resource Management (ERM), the company contracted to produce the report, is being investigated by the Department of State for conflict of interest in producing the EIS. The oil industry continues to follow the playbook laid down in the “Global Climate Science Communications Action Plan” by the API in 1998. As environmental groups have grown in influence over the past 30 years, corporations have had to change their tactics in relation to the issue of climate change. Thus has grown the management area of corporate environmentalism. Environmental Management Resources is a whole company devoted to corporate environmentalism; the capitalist class maintains hegemony over the climate change debate.

Fort McMurray, Alberta. Despite the success of environmental protests, is the Keystone Pipeline an inevitability? Flickr/Kris Krüg. Some Rights Reserved.

In 1998 API in consultation with various other right wing groups produced the Global Climate Science Communications Action Plan. This was a plan spreading disinformation about climate change through scientists, the media, and schools. Two of the tactics included in the Action Plan were:

"Identifying and establishing cooperative relationships with all major scientists whose research in this field supports our position.

Establishing cooperative relationships with other mainstream scientific organizations (e.g., meteorologists, geophysicists) to bring their perspectives to bear on the debate, as appropriate."

These strategies are aimed directly at scientists. But API has clearly been establishing “cooperative relationships” with consulting firms like ERM; ERM is a member of API.

Corporate Environmentalism is ostensibly devoted to helping corporations meet their obligations in relation to social and environmental responsibilities to protect their investments. This is generally known as “green wash” among environmental groups. Part of ERM’s activities involve being contracted by companies to advise them how to meet their legal obligations in relation to the environment, labor laws or other regulations concerning their various profit-making projects such as mines, oil processing and energy production. For example Kenneth Weiss conducts workshops to teach corporations how to apply for permits under the Clean Energy Act so that their permits comply with the law. Whether the project on the ground is consistent with the information in the permits is another question.

Ioannis Chrysostomidis is senior consultant with ERM’s energy and climate change practice and provides strategic advice to clients on energy and climate change issues. She has written:

“The extractives sector is considered critical in building a more sustainable global economy. Capital investments made today, whether into mining, conventional or unconventional oil and gas developments like shale gas and oil sands have the potential to secure the world’s future energy and resource demand for decades to come. Considering the long timescales and the importance of these investments, it would be negligent not to consider the steps necessary to make such projects resilient to future expected climate change related risks.”

This perspective is consistent with corporate environmentalism and reflects the hegemony of the corporate class in relation to climate change. It advocates the continued extraction of coal, oil, and gas but recognizes that it is necessary to consider “potential risk mitigating techniques.” These risks include “third party” damage (presumably by environmental groups), catastrophic weather events and changing climactic conditions. There is no sense that we need to stop using these resources if we are to survive climate change. It seems a fairytale world these people are living in, where the impacts of climate change will not affect them.

Richard MacLean, executive director of the Center for Environmental Innovation, announced the defeat of environmentalism. In Environmental Quality Management he wrote:

“Companies have grown increasingly sophisticated at communicating their messages and successes. In many respects, environmentalists have been beaten at a game they ruled during the 1970s and 1980s. Today it is environmentalists who appear to be losing the war of words—a key point made in ‘The Death of Environmentalism.’”

Environmental management is the need to successfully communicate a positive image for corporations. This does not involve compliance with regulations unless absolutely necessary. It does not mean that corporations need to take into account the impact their projects will have for example on global warming. The report produced by ERM is simply a reflection of this corporate hegemony.

In examining the conclusions of the ERM report there is a remarkable resemblance between its findings and the arguments of American Petroleum Institute.

“…the total annual GHG emissions from the proposed pipeline operation amount to 1.44 MMTCO2e per year. In 2010, total U.S. GHG emissions (CO2e from anthropogenic activities) amounted to approximately 6,822 million metric tons (USEPA 2012), which used the 100-year GWP values from IPCC’s Second Assessment Report (IPCC 1996). Globally, approximately 30,326 million metric tons of CO2 emissions were added to the atmosphere via the combustion of fossil fuels in 2010 (IEA 2012). To put these emissions into context, the annual CO2e emissions from the proposed Project are equivalent to CO2e emissions from approximately 300,000 passenger vehicles operating for 1 year, or 71,928 homes using electricity for 1 year.”

This implies that the emissions are negligible and that this energy would be consumed anyway. Given that, in order to stabilize CO2 concentrations at about 450 ppm by 2050, global emissions would have to decline by about 60% by 2050 and industrialized countries greenhouse gas emissions would have to decline by about 80% by 2050, it seems unlikely that this project would contribute to meeting that goal.

In addition, a Stockholm Environment Institute Working Paper from December last year concluded that:

As environmental groups have grown in influence over the past 30 years, corporations have had to change their tactics in relation to the issue of climate change. The paper also argues that the increase in annual emissions produced by the transport of the oil along the Keystone pipeline would be roughly equivalent to 1–2% of current US emissions and 10% of the emission reductions that the US government has pledged to achieve by 2020 (to 17% below 2005 levels). This would counteract any emission reductions that federal climate mitigation policies, such as US Environmental Protection Agency performance standards on industrial boilers, cement kilns, and petroleum refineries, could achieve by 2020.

There is a frightening congruence between the positions of the API, ALEC and the findings of the ERM report. Cindy Schild, Senior Manager of the American Petroleum Institute’s refining and oil sands program, declared the inevitability of the continuation of this project.

“So right now we’ve got half of this line built. We need to finish it. And when you talk about energy security, it’s absolutely—you know, this is in the interest of consumers. We’re going to end up getting—demand is demand. So whether those refineries in the Gulf are fed supplies from the United States domestic production in Canada or it’s going to get it from less stable regions of the world, that’s what’s going to happen. And that oil that’s sitting in the ground in Canada, their largest source of GDP, it’s not going to stay there. It’s going to get to market.”

Not surprisingly, API has been active on the Energy, Environment and Agriculture task force of the American Legislative Exchange Council (ALEC), according to documents released by Common Cause. The above finding by ERM minimizing the impact of the emissions produced by the Keystone project seems to sit very comfortably with the ALEC “Resolution in Support of the Keystone XL Pipeline”:

“WHEREAS, The United States relies – and will continue to rely for many years – on gasoline, diesel and jet fuel despite the recent focus on renewable and alternative sources of energy, and

WHEREAS, In order to fuel our economy, the United States will need more oil and natural gas while also requiring additional alternative energy sources. ...”

The report from ERM seems to agree with this perspective.

“…approval or denial of any one crude oil transport project, including the proposed Project, is unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States (based on expected oil prices, oil-sands supply costs, transport costs, and supply-demand scenarios).”

The report claims that even if the Keystone pipeline is not approved, the 830,000 bpd of oil sands crudes will be extracted and transported anyway. The emissions will inevitably be produced, even if the pipeline is not approved.

The ERM report also discusses the economic impact of the project:

“During construction, proposed Project spending would support approximately 42,100 jobs (direct, indirect, and induced), and approximately $2 billion in earnings throughout the United States…. Construction of the proposed Project would contribute approximately $3.4 billion (or 0.02 percent) to the US gross domestic product (GDP). The proposed Project would generate approximately 50 jobs during operations.” DOS EIS

Similarly, the ALEC resolution reads:

“WHEREAS, the Keystone XL pipeline will, when completed, carry 700,000 barrels of North American crude oil to American refineries in the Gulf Coast region; and

WHEREAS, construction of the project will create 120,000 jobs nationwide including 20,000 in construction and manufacturing, create $20 billion in economic growth and generate millions of dollars worth of government receipts”

While the numbers differ the content is remarkably similar. The arguments of ALEC and the API emphasize economic growth, US national interest and oil self-sufficiency. They consistently ignore the very real impact on climate change and the need to move away from dependency on GHG-producing resources.

The consistency between the perspective of the API and the ERM report reflect corporate hegemony in relation to climate change. This perspective consistently projects an image that the risks of climate change can be managed and the extraction of dirty energy resources should continue. Environmental groups wage a battle on the ground to stop the Keystone pipeline as a strategy to reduce the amount of oil being extracted and increasing global warming. ERM’s report delivers a serious blow to this campaign.

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